Health Care

How the Health-Care Debate Would Change If Graham-Cassidy Passes

Republicans want states to control American health programs. That may actually play to Democrats' advantage.

Lindsey Graham has a plan.

Photographer: Alex Wong/Getty Images

What a difference a week makes.

Last week, many commentators (including me) saw the Graham-Cassidy bill as a bit of Hail Mary legislating, a last desperate stand against Obamacare. This week, it started to look as if it might actually have some chance of passage. The legislative math remains daunting; the parliamentary obstacles high. But the status of Republican health-care efforts has moved from “flatline” to “still breathing, barely.”

The situation is so fluid that I don’t want to make predictions, other than to say that the chances of passage are still south of 50 percent. But as long as it’s a live possibility, we have to think about what passage might mean. I think that one of the most interesting, and least explored, questions is what our health-care politics would look like if this thing managed to pass.

Why is that an interesting question? Because before 2008, we barely even had anything that people in other Western democracies would recognize as health-care politics. In most such countries, the health minister is one of the most important government jobs -- far more important, in many places, than heading a tiny and toothless defense ministry. And debates over the national health-care program, whatever its design, are major issues in election after election.

In the U.S., before 2008, Democrats would complain about the cost of our health-care spending, and then perform ritual obeisance to some never-never national health-care program. Republicans would largely ignore the issue while mouthing the words “block grants” -- code for taking money and power from the federal government and giving it to states via discretion over Medicaid. No one would talk much about all the spending we were already doing on programs like Medicare, Medicaid and the VA. Every four elections or so, Democrats might get close to some sort of national health-care scheme, but they always found that in the end, while voters might like the idea of guaranteed health care, they sure didn’t like the taxes needed to pay for it, or the changes that would have to be made in their own very satisfactory arrangements.

It took the worst financial crisis in 70 years to alter that dynamic, along with a bout of mass delusion among moderate Democrats, who somehow convinced themselves that voting to pass Obamacare wouldn’t end their political careers. Whatever else those legislators gave us, good or ill, they also gave us a more “normal” health-care politics, in which both the electorate and the elected spend immense amounts of time quibbling over health-care policy, even to the exclusion of other things they’d really like to get done.

If Graham-Cassidy passes, it will return us to something more like the health-care politics of yore, because the federal government will be (mostly) out of the health-care-program business (with the huge and growing exception of Medicare). Feds will provide much of the funding. 1  But the states will be the ones in charge of deciding what the system in their state will look like.

Of course, Democrats can one day undo what Republicans are doing, just as Republicans are planning to undo the work of the Democrats. The left can pass another Obamacare, or some different, more expansive plan. But to do so, they will have to go through the whole painful process of passing Obamacare all over again: soothe or pay off all the anxious interest groups; find the extra tax dollars to fund it; reassure voters who have good insurance that they will not lose by the new plan.

This task will be immensely harder in Round 2 than it was in 2010. By the time they get around to it (in 2020, soonest), Democrats will be forced to scavenge for new sources of funding at the same time as every predator on K Street is scouring the landscape to feed our existing defense commitments and rapidly growing entitlement burden.

They will also be trying to whip up support from a public largely exhausted by the last decade of wild promises and underwhelming delivery from both sides of the aisle. Thanks to the experience of Obamacare, that public will be inclined to disbelieve any assurances about how splendid this will be for folks who already have insurance they like. And Democrats will somehow have to overcome all these political obstacles without a once-in-a-lifetime financial crisis handing them unnaturally large congressional majorities.

It is more likely that health-care politics in America will mostly move down to the states, permanently, where they will become vigorous and perennial. This will mean the end of wall-to-wall media coverage of that politics, because the media is nationalizing, while state and local outlets keep dwindling, and it is too hard to get people in California interested in the blow-by-blow details of something happening in Georgia. It will also mean the end of the Democratic dream of a national single-payer system. It will probably mean the end of the dream of single-payer, period, because the obstacles to single-payer at the state level are simply too enormous; it is too hard to control payment when people often cross state borders to seek treatment, and too hard to finance, when states have to run budgets that are at least nominally balanced.

And yet, this could still be very good news for the Democratic Party.

Democrats have a strong natural advantage in health-care politics: They have cared about it for a very long time. They have poured a lot of time and money into developing the policy infrastructure to design health-care plans and get them passed. Republicans have not done that work, as a party, though there are certainly many smart individuals working on the issue. With 50 states exploring custom health-care programs, Democrats have a chance to ride in waving all that expertise, and reverse some of their devastating losses at the state and local level.

Democrats need to regain some of those seats, not just because it will give them more power over state policy, but because those state-level offices are where most people begin their political careers. The fewer of them your party holds, the fewer chances you have to discover a future star.

Can Democrats win back states they’ve lost by marching into 50 capitols and proposing single payer? Certainly not. But they may be able to win back those states by designing local solutions that fit the local politics, economy and cultural values, while pushing those places a little closer to progressive ideals. And in the process, they might bring some political diversity into their own party, which would be good for Democratic electoral fortunes, and good for America. 

If that sounds a little optimistic -- well, perhaps so. But then, the optimists aren’t always wrong. Just ask anyone who thought that Graham-Cassidy would never even come this close to a vote.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
  1. Graham-Cassidy theoretically makes enormous federal spending cuts by the end of the decade, but I’m fairly confident that the feds will be financing state health-care programs for quite some time to come.

To contact the author of this story:
Megan McArdle at mmcardle3@bloomberg.net

To contact the editor responsible for this story:
Philip Gray at philipgray@bloomberg.net

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